ED freezes ₹51.75 crore in DHFL loan fraud probe

The agency said the funds in the account of M/s Al Jalore Trading FZE were allegedly proceeds of crime and were frozen under the Prevention of Money Laundering Act (PMLA) during searches last Wednesday

MUMBAI: : The Enforcement Directorate (ED) has frozen ₹51.75 crore in the bank account of an overseas trading firm in India in its money-laundering probe into the alleged ₹34,615-crore loan fraud involving Dewan Housing Finance Corporation Limited (DHFL) and its then promoters.

ED freezes ₹51.75 crore in DHFL loan fraud probe

The agency said the funds in the account of M/s Al Jalore Trading FZE were allegedly proceeds of crime and were frozen under the Prevention of Money Laundering Act (PMLA) during searches last Wednesday. Documents and records linked to the transactions and assets under investigation were also seized.

The action is linked to the ED’s investigation into Hurtmore House, a property in the United Kingdom held in the name of Vanita Wadhawan, wife of then DHFL promoter Kapil Wadhawan.

An alleged purported loan agreement was executed between the Al Jalore Trading FZE and Vanita Wadhawan, after which the property was mortgaged to the trading firm, ED officials said on Friday.

ED’s probe has revealed that the arrangement was allegedly used to create a liability against the property in connection with the alleged DHFL loan fraud. The property was allegedly sold this year, and the sale proceeds were transferred to the trading firm’s Indian bank account instead of being received by its registered owner, Vanita.

“The transaction, thus, involved dissipation of proceeds of crime, utilisation and disposal of a foreign asset in a manner intended to facilitate the settlement of an Indian liability through a structured transaction involving foreign property and entities”, an ED official said.

During the searches conducted on August 19, the ED examined the trading firm’s account and froze, under the Prevention of Money Laundering Act (PMLA), around ₹51.75 crore ($5.41 million), which it alleges represents proceeds of crime.

The money-laundering case stems from an FIR registered by the Central Bureau of Investigation (CBI) following a complaint by Union Bank of India on behalf of a consortium of 17 banks.

The CBI’s FIR has alleged that former DHFL directors Kapil Wadhawan and Dheeraj Wadhawan, among others, conspired to cheat the consortium, which had sanctioned credit facilities worth ₹42,871.42 crore to DHFL.

The loan funds were subsequently diverted and misappropriated through falsification of DHFL’s books, causing a wrongful loss of around ₹34,615 crore to the lenders.